DoJ, U.S. Patent Office say sales bans from SEP suits should be a rarity

In a joint policy statement issued late Tuesday, the Department of Justice and the U.S. Patent and Trademark Office said companies that own so-called standard-essential patents should rarely be allowed to garner sales bans due to infringement findings.

While coming down hard on tech companies leveraging their SEPs to gain an advantage in the U.S. market, the statement is also an appeal to the U.S. International Trade Commission to keep the public interest in mind when ordering injunctions, reports Reuters.

"The USITC, may conclude, after applying its public interest factors, that exclusion orders (sales injunctions) are inappropriate," the statement read.

Instead of injunctions, the Justice Department and USPTO said monetary damages should be implemented as punishment in cases where infringement is found. The bodies went on to say that only in a handful of specific cases should sales bans be levied.

The policy statement is germane to ongoing worldwide smartphone litigation, much of which involves the battle between Apple and multiple Android manufacturers including Samsung and Google's Motorola.

As for the ITC, the commission is currently reviewing a decision from an administrative law judge that cleared Apple of infringing on Samsung patents, two of which are deemed standard-essential.

Tuesday's policy statement is not binding in court, but federal judges may heed the opinions in upcoming cases.

This is an absolutely awful decision by the Obama Administration and undercuts the whole idea of intellectual property. Why reward intellectual thieves? Intellectual property is critical to our economy in the 21st Century.

This is an absolutely awful decision by the Obama Administration and undercuts the whole idea of intellectual property. Why reward intellectual thieves? Intellectual property is critical to our economy in the 21st Century.

Paul Harding, FAIA

Harding Partners Architects

Chicago

Amazing. An article that short, and you still didn't even bother to read it before posting. Either that, or you haven't wrapped your head around the concept of the "Standards Essential Patent", in which case, why post on something you don't understand? I suppose there's also the third possibility this was a lame attempt to troll, but I'll assume that's not the case ... for now.

So, what "intellectual thieves" are you referring to? How is this undercutting the "whole idea of intellectual property"? The piece is talking about [generally] disallowing sales bans requested by IP holders who abuse SEP patents (for example, by demanding unfair/unreasonable licensing fees for a contribution that's encumbered with FRAND obligations). It has nothing to do with non-SEP IP infringement or sales bans of [non-SEP] infringing products.

While coming down hard on tech companies leveraging their SEPs to gain an advantage in the U.S. market, the statement is also an appeal to the U.S. International Trade Commission to keep the public interest in mind when ordering injunctions, reports Reuters.

"The USITC, may conclude, after applying its public interest factors, that exclusion orders (sales injunctions) are inappropriate," the statement read.

Good luck. The ITC's entire purpose and sole enforcement power is stopping importation of infringing products. Not even Presidential appeals work on them most of the time.

They might issue a policy statement saying they'll try not to use exclusions in most cases, but they sure aren't going to give them up entirely.

This looks like a power struggle between departments.

Instead of injunctions, the Justice Department and USPTO said monetary damages should be implemented as punishment in cases where infringement is found.

Only the courts can issue monetary damages. The ITC cannot. It only has exclusionary powers.

Tuesday's policy statement is not binding in court, but federal judges may heed the opinions in upcoming cases.

Or not. Some might even feel that the USPTO overstepped their bounds by getting involved.

I'd love to skip forward 20 years and see if this problem is solved yet.

Pay attention to the actual statement from the DoJ. It's not even as restrictive as the recent agreement between Google and FTC. The Justice Dept appears to be OK with SEP injunction requests as long as the licensee is unwilling to negotiate. Note the use of that specific word, which leaves the open interpretation of what encompasses negotiation. If the licensor makes an offer which is rejected but the potential licensee fails to make a counter-offer, is it a negotiation? IMHO it would not be. At least one Federal judge already ruled that negotiations on SEP licensing terms should not be required in the first place. And what if the licensee makes a ridiculously low counter-offer. Is it still a real negotiation? Hardly a clear and concise statement issued by the DoJ and USPTO.

At the end of the day the only thing clear is that injunctions for standards-essential IP is certainly legal and acceptable under certain circumstances. Otherwise the appropriateness for anyone other than Google is murky. The FTC/Google agreement doesn't apply to other SEP holders and the DoJ appears to be much more open to the use of injunctions.

Pay attention to the actual statement from the DoJ. It's not even as restrictive as the recent agreement between Google and FTC. The Justice Dept appears to be OK with SEP injunction requests as long as the licensee is unwilling to negotiate.

And that's how it should be. No prelim injunctions during court cases. No injunctions after, so long as the infringer agrees to pay for future use. If they refuse after it has been confirmed there was infringement then it doesn't matter if its SEP, so long as a fair deal is on the table. If I ask $1 from everyone else, you can't refuse because you would simply only pay 5 cents. You can ask the court to decide if that $1 is reasonable but if they say yes, and you still won't pay then you earned a ban.

And that's how it should be. No prelim injunctions during court cases. No injunctions after, so long as the infringer agrees to pay for future use. If they refuse after it has been confirmed there was infringement then it doesn't matter if its SEP, so long as a fair deal is on the table. If I ask $1 from everyone else, you can't refuse because you would simply only pay 5 cents. You can ask the court to decide if that $1 is reasonable but if they say yes, and you still won't pay then you earned a ban.
And so on.

Prelim injunctions never happen at the ITC anyway.

This statement is basically to discourage current suits like the Ericsonn VS Samsung cases from wasting the ITC's resources deciding FRAND SEPs. Why waste the government resources on what is basically a contract/pricing dispute.

The DOJ/USPTO are basically saying that they would support congressional changes to the ITC powers if this system keeps getting abused.

This is an absolutely awful decision by the Obama Administration and undercuts the whole idea of intellectual property....

Can you explain this?? They are still going to hold them responsible. We are discussing SEP properties licensed under FRAND here.

Quote:

Originally Posted by pharding

...Why reward intellectual thieves?...

Like Samsung? They are guilty for both abusing FRAND patents and lifting intellectual property rights of others.

Quote:

Originally Posted by pharding

Paul Harding, FAIA

Harding Partners Architects

Chicago

Professional credentials aren't needed in this forum, but being an Architect, bet it would make you mad if I copied to look of one of your projects just like Samsung did to Apple. But, the article is about intellectual property that is licensed under FRAND and is needed to even make a product in the market. Companies have been holding these hostage for higher royalties and even moving the license fee off the component level to the whole device. This all clearly shows they need better rules for FRAND, established license fees (decided at time it is made a SEP), and the trigger point established for the fee.

This is an absolutely awful decision by the Obama Administration and undercuts the whole idea of intellectual property. Why reward intellectual thieves? Intellectual property is critical to our economy in the 21st Century.

Paul Harding, FAIA

Harding Partners Architects

Chicago

If you are a big fan of IP, then rest assured Obama is your guy. He is in the big boys back pocket and trying hard to further expand IP rights way past what was ever intended under the Constitution. Copyright protections have become absurd in this Country and around the world.

With that said, the Justice Department is taking a common sense view WITHOUT fully embracing it. Namely, with SEPs the holders of such patents have already agreed to allow anybody to use such patents under certain terms. So, the issue shouldn't be an injunction, but damages. Take Apple. Apple is willing to pay for certain SEP patents, it simply disagrees with various patent holders what fair, reasonable, and non-discriminary terms are. With SEPs, the holders of such patents can't charge Apple more than it is charging Apple's competitors and that fee has to be deemed reasonable. SEP holders have been trying to use the treat of injunctions to get around their obligation to offer the patents under fair, reasonable, and non-discriminate terms. Again take Apple. If a company won an injunction on its iPhone based on an SEP, Apple would be forced to agree to terms other than what the holder agreed to. Meanwhile the IP holder is not damaged by not being able to get an injunction because since it already agreed to make its patents available, money will satisfy any damages.

Pay attention to the actual statement from the DoJ. It's not even as restrictive as the recent agreement between Google and FTC. The Justice Dept appears to be OK with SEP injunction requests as long as the licensee is unwilling to negotiate. Note the use of that specific word, which leaves the open interpretation of what encompasses negotiation. If the licensor makes an offer which is rejected but the potential licensee fails to make a counter-offer, is it a negotiation? IMHO it would not be. At least one Federal judge already ruled that negotiations on SEP licensing terms should not be required in the first place. And what if the licensee makes a ridiculously low counter-offer. Is it still a real negotiation? Hardly a clear and concise statement issued by the DoJ and USPTO.

At the end of the day the only thing clear is that injunctions for standards-essential IP is certainly legal and acceptable under certain circumstances. Otherwise the appropriateness for anyone other than Google is murky. The FTC/Google agreement doesn't apply to other SEP holders and the DoJ appears to be much more open to the use of injunctions.

I noticed this as well. The DOJ's position on SEPs don't match up with the strong view in places like Europe. I also don't think a negotiation should be required. The reason being that the terms are supposed to be non-discriminatory. The SEP holder should show what it charges others. If an SEP holder is charging company A far less then it wants to charge company B, why would company B pay?